Australian Potash Limited and Another v Kalman Murphy & Ors on behalf of Waturta
[2021] NNTTA 24
•2 June 2021
NATIONAL NATIVE TITLE TRIBUNAL
Australian Potash Limited and Another v Kalman Murphy & Ors on behalf of Waturta [2021] NNTTA 24 (2 June 2021)
Application No: | WF2021/0002, WF2021/0003, WF2021/0004 |
IN THE MATTER of the Native Title Act 1993 (Cth)
- and -
IN THE MATTER of an inquiry into a future act determination application
Australian Potash Limited
(grantee party)
- and -
Kalman Murphy & Ors on behalf of Waturta (WC2018/012)
(native title party)
- and -
State of Western Australia
(Government party)
DECISION ON WHETHER THE TRIBUNAL HAS POWER TO CONDUCT AN INQUIRY
Tribunal: | Mr Glen Kelly, Member |
Place: | Perth |
Date: | 2 June 2021 |
Catchwords: | Native title – future act – application for a determination in relation to mining leases – power to make determination – whether government party has negotiated in good faith – government party has negotiated in good faith – Tribunal has power to proceed with future act determination inquiry |
Legislation: | Mining Act 1978 (WA) ss 75, 78, 85, 125A Mining Regulations 1981 (WA) Native Title Act 1993 (Cth) ss 24, 26, 29, 30A, 31, 35, 36, 38, 151 |
Cases: | Brownley v Western Australia[1999] FCA 1139 (Brownley) Drake Coal Pty Ltd, Byerwen Coal Pty Ltd/Grace Smallwood & Ors (Birri People)/Queensland [2012] NNTTA 9 (Drake Coal) FMG Pilbara Pty Ltd v Cox[2009] FCAFC 49 (Cox) Gulliver Productions Pty Ltd/Western Desert Lands Aboriginal Corporation (Jamukurnu-Yapalikunu) & Ors/Western Australia [2005] NNTTA 88 (Gulliver) Marjorie May Strickland & Ors v Minister for Lands & Anor [1998] FCA 868 (Strickland) North Ganalanja Aboriginal Corporation & Waanyi People v Queensland [1996] HCA 2; (1996) 185 CLR 595 (North Ganalanja) Placer (Granny Smith) Pty Ltd and Granny Smith Mines Limited/Western Australia/Ron Harrington-Smith & Ors on behalf of the Wongatha people [1999] NNTTA 361(Placer (Granny Smith)) Rita Dempster & Ors (Southern Noongar)/Bayside Abalone Farm Pty Ltd & Anor/Western Australia [1999] NNTTA 235 (Dempster) Rusa Resources (Australia) Pty Ltd v Sharon Crowe and Others on behalf of Gnulli [2018] NNTTA 81 (Gnulli) Xstrata Coal Queensland Pty Ltd & Ors/Mark Albury & Ors (Karingbal #2);Brendan Wyman & Ors (Bidjara People)/Queensland [2012] NNTTA 93 (Xstrata) Western Australia/Arthur Dimer & Ors (Ngadju People); Cyril Barnes & Ors (Central East Goldfields People)/Equs Limited [2000] NNTTA 290 (Dimer) Western Australia/David Daniel & Ors on behalf of the Ngarluma and Yindjibarndi People; Valeria Holborow & Ors on behalf of the Yaburara and Madudhunera People; Wilfred Hicks & Ors on behalf of the Wong-goo-tt-oo People [2002] NNTTA 230 (Daniel) Western Australia/Johnson Taylor on behalf of the Njamal people/Garry Ernest Mullan [1996] NNTTA 34 (Njamal) Western Australia/Roberta Vera Thomas & Ors (Waljen)/Austwhim Resources Nl; Aurora Gold (WA) Ltd [1996] NNTTA 30 (Waljen) White Mining (NSW) Pty Ltd, Austral-Asia Coal Holdings Pty Ltd & ICRA Ashton Pty Ltd/Scott Franks & Anor (Plains Clans of the Wonnarua People)/New South Wales[2011] NNTTA 72 (White Mining) |
| Representative of the native title party: | Ronelia Motroni, Cross Country Native Title Services Pty Ltd |
| Representative of the grantee party: | Ken Green, Green Legal |
| Representative of the Government party: | Domhnall McCloskey, State Solicitor’s Office |
REASONS FOR DETERMINATION
Background
On 12 August 2020 the State of Western Australia (the State) issued a notice pursuant to s 29 of the Native Title Act 1993 (Cth) (NTA) that it intends to grant mining leases M38/1287, M38/1288 and M38/1289 (collectively, ‘the leases’) to Australian Potash Limited (APL). As is set out in the notice, the leases together comprise an area of 2,209.12 Ha and are located approximately 165km in a northerly direction from Laverton in Western Australia.
The Waturta People (Waturta) are the registered native title claimants for an area including the entirety of the area of the leases (WAD297/2018).
Following the s 29 notice, the negotiation parties are required to conduct a good faith negotiation with a view to obtaining the agreement of Waturta to perform the future act (NTA s 31(1)). Pursuant to s 30A of the NTA, the Government party, APL and Waturta are all negotiation parties. The parties did not reach agreement and on 14 February 2021, just over six months after the notification day, APL applied to the Tribunal for a determination that the future acts may be done pursuant to s 38 of the NTA.
On 19 February 2021, I was appointed by the President of the Tribunal to conduct the inquiry in this matter.
Per s 36(2) of the NTA and as clarified by Cox at [11], I cannot proceed to make a determination in this matter if Waturta satisfy me that either the Government party or APL failed to negotiate in good faith as required by s 31(1) of the NTA. Waturta alleges that the Government party did not negotiate in good faith, however makes no such assertion against APL.
For the reasons outlined, I am not satisfied that Waturta’s allegation against the Government party has been made out.
Tribunal proceedings
The applications for a s 38 future act determination from APL were accepted by the Tribunal on 19 February 2021.
The parties were notified that a preliminary conference to discuss directions for the subsequent inquiry process was to be held on 4 March 2021. Draft directions were circulated to the parties in advance of this conference.
Prior to and during the conference the parties were advised it was my intention to run any good faith inquiry in advance of the s 35 inquiry upon ascertaining whether there was to be any allegations of a lack of good faith. As Waturta indicated that this was to be the case and they would allege a lack of good faith on the part of the Government party, directions were made accordingly.
On 25 March 2021, Waturta provided a statement of contentions addressing their good faith allegation against the Government party which was accompanied by a number of supporting documents which are detailed in a further section of these reasons.
While the allegation of good faith was not against APL, it did provide a set of contentions as part of the good faith inquiry on 8 April 2021, along with a number of supporting documents which are detailed in a further section.
The Government party was unable to comply with its initial compliance date of 8 April 2021 and formally requested a short extension. Given the circumstances described in the request this was granted and the Government party then provided contentions on 12 April 2021. The contentions of the Government party rely heavily on those provided by APL and no supporting documentation was provided.
Following two separate one-week extensions to the directions, Waturta provided its contentions in reply on 4 May 2021 along with a further affidavit from Ms Shzan Plandowski.
The views of the parties were then sought as to whether they were content for the inquiry to proceed on the papers. Both APL and Waturta responded in the affirmative however the Government party advised that it had concerns with the Waturta reply and requested a directions hearing to assist the Tribunal to deal with those concerns.
The Tribunal sought further information from the Government party on its concerns and it responded that it was of the view that Waturta’s response went beyond what a party is entitled in a reply and had added fresh arguments and assertions. Waturta argued that the reply and supporting documentation respond directly to matters raised by the Government party and APL in their contentions.
To assist the Tribunal in its decision making process on whether to convene a hearing, the Tribunal again reached out to the parties to advise that the scope of any potential hearing would be limited to those matters the Government party considered could not be adequately dealt with on the papers. The Government party was asked to particularise the concerns it may wish to raise.
The Government party responded with further detail of its concerns. Following a review of this material, I concluded that the concerns raised were not issues that are central to this determination and that the materials lodged by the parties adequately addressed the matters in contention. As such I determined pursuant to s 151 of the NTA that the matter could proceed to determination on the papers and the parties were advised of my decision on 20 May 2021.
Good Faith Material
Following is a summary of the material provided by the parties for the inquiry into good faith.
Waturta:
a)Contentions dated 25 March 2021;
b)Affidavit of Shzan Heidi Plandowski dated 23 March 2021;
c)Contentions in Reply dated 4 May 2021;
d)Affidavit 2 of Shzan Heidi Plandowski dated 4 May 2021; and,
e)Supporting documentation for contentions comprising the following:
Reference Description Date Waturta Doc A
Post notification correspondence from Government party (DMIRS) to Waturta
10 September 2020
Waturta Doc B
Email chain between Shzan Plandowski and Domnhall McCloskey
18 January 2021
Waturta Doc C
Copy of WA State Deed For Grant of Mining Tenement
Not dated
Waturta Doc D
Correspondence from Domnhall McCloskey (Government party) to Shzan Plandowski (Waturta)
29 January 2021
Waturta Doc E
Correspondence from Shzan Plandowski (Waturta) to Domnhall McCloskey (Government party)
5 February 2021
Waturta Doc F
Correspondence from Domnhall McCloskey (Government party) to Shzan Plandowski (Waturta)
11 February 2021
Waturta Doc G
Correspondence from Shzan Plandowski (Waturta) to Domnhall McCloskey (Government party)
22 February 2021
APL:
a)Contentions dated 8 April 2021;
b)A Chronology for the Good Faith Hearing;
c)A List of Authorities;
d)A List of Documents for the Good Faith Hearing; and,
e)Supporting documentation comprising the following:
Reference Description Date APL Doc 1
Email from Government party to Ken Green - pre November 2015 WA State Deed for Grant of Mining Tenement
22 May 2009
APL Doc 2
Section 29 Notice for M38/1287, M38/1288 and M38/1289
12 August 2020
APL Doc 3
Post notification correspondence from Government party to Waturta (also Waturta Doc A)
22 September 2020
APL Doc 4
Letter Ken Green to Waturta with APL Mining Statements and Mineralisation Reports attached
20 September 2020
APL Doc 5
Email from APL to NNTT requesting mediation assistance
15 October 2020
APL Doc 6
Email from NNTT to Negotiation Parties, Synopsis of Mediation Conference held on 12 November 2020
13 November 2020
APL Doc 7
Email from Waturta to Parties
20 November 2020
APL Doc 8
Email from NNTT to Parties
26 November 2020
APL Doc 9
Email from Government party to Parties
26 November 2020
APL Doc 10
Email from Waturta to Government party
26 November 2020
APL Doc 11
Email from Government party to Waturta with mapping
30 November 2020
APL Doc 12
Email from Government party to Waturta with revised mapping
30 November 2020
APL Doc 13
Email exchange between NNTT, Waturta and Parties
1 December 2020
APL Doc 14
Email exchange re maps between Waturta and Government party
3 December 2020
APL Doc 15
Email from NNTT to Parties with Synopsis of Mediation held on December 1 and 2, 2020
4 December 2020
APL Doc 16
Email from Government party to Waturta
14 January 2021
APL Doc 17
Email from Waturta to Government party (also Waturta Doc B)
18 January 2021
APL Doc 18
Email from Waturta to Government party
20 January 2021
APL Doc 19
Email from Government party to Waturta
22 January 2021
APL Doc 20
Email from NNTT to Parties with Synopsis of Mediation held on 22 January 2020
28 January 2021
APL Doc 21
Correspondence from Government party to Waturta (also Waturta Doc D)
29 January 2021
APL Doc 22
Email from Government party to Waturta including copy of 10 September 2020 Government party to Waturta correspondence (also Waturta Doc A)
1 February 2021
APL Doc 23
Correspondence from Waturta to Government party (also Waturta Doc E)
5 February 2021
APL Doc 24
Correspondence from Government party to Waturta (also Waturta Doc F)
11 February 2021
APL Doc 25
Email from APL to NNTT lodging s 35 applications
14 February 2021
APL Doc 26
Correspondence from Waturta to Government party (also Waturta Doc G)
22 February 2021
APL Doc 27
Email from APL to NNTT
4 March 2021
APL Doc 28
Affidavit of Kenneth John Green
8 April 2021
Government party:
a)Contentions lodged 12 April 2021.
Legal Principles for assessing negotiation in good faith
The High Court at [24] in North Ganalanja set out that:
‘[i]t is erroneous to regard the registered native title claimant’s right to negotiate as a windfall accretion to the bundle of rights for which the claimant seeks recognition by the application. If the claim is well founded, the claimant would be entitled to protection of the claimed native title…’
Referring to Waljen at [16]-[22] at which an approach to statutory interpretation in relation to future act matters is adopted, Deputy President Sumner in Njamal repeats the conclusion reached in that matter that:
‘the future act and right to negotiation provisions should be construed beneficially consistent with the language used, having regard to their overall purpose in balancing the rights of native title parties and the broader community.’
From these interpretations, Deputy President Sumner also sets out at [31] that:
The negotiation process is at the core of the future act regime. This is emphasised by the fact that the obligation to negotiate in good faith is imposed on the Government party. The Government party can ensure that the right which is given to Aboriginal people can be effectively utilised and not be a right which exists in name only. The imposition of the obligation on the Government party will help to ensure that the ‘right to be asked’ and the ‘special right to negotiate’ which is given to Aboriginal people by the Act is effective. A Government party is in a special position to have regard to the public interest in ensuring that the beneficial intentions of Parliament are realised.
As Deputy President Sumner also sets out at [32] of Njamal however, there ‘is no specific reference in the Act to the meaning of the phrase ‘negotiate in good faith’ other than what is stated in s 31 and the Preamble’, noting that the Preamble of the NTA sets out that future acts should be done after ‘every reasonable effort has been made to secure the agreement of the native title holders through a special right to negotiate.’
Deputy President Sumner in Njamal at [34] states that the ‘…phrase ‘every reasonable effort’ has been translated into the requirement to negotiate in good faith in s 31(1)(b)’ with this section setting out that ‘the negotiation parties must negotiate in good faith with a view to obtaining the agreement of each of the native title parties’, or native title party where there is just one.
It has been accepted that the term ‘good faith’ is to be interpreted in its natural and ordinary meaning. Notions of both negotiation and good faith are summarised in Strickland at [38]:
The words “negotiate in good faith” are not defined in the NT Act and must be given their normal meaning having regard to the statutory context and principles of statutory construction. “Negotiation” involves communicating, having discussions or conferring with a view to reaching an agreement. Good faith involves both subjective honesty of purpose or intention and reasonableness of effort to negotiate and reach agreement.
In Brownley, Lee J sets out at [23] that:
The duty to negotiate in good faith imposed by s 31 incorporates, at least, some part of the duty as understood by the general law, namely an obligation to act honestly, with no ulterior motive or purpose, albeit that the negotiation may be conducted negligently or incompetently.
In ascertaining whether a party has acted in good faith, assessment is directed towards the quality of the conduct of a party and to their state of mind. As set out in Cox at [20]:
It has been repeatedly recognised that the requirement for good faith is directed to the quality of a party’s conduct. It is to be assessed by reference to what a party has done or failed to do in the course of negotiations and is directed to and is concerned with a party’s state of mind as manifested by its conduct in the negotiations: see, for example, [Brownley at [24]- [25] , Strickland at 319-320 and Waljen at [7]-[18]].
A key point here as set out at [38] of Cox is that the requirements of s 31(1)(b) will be satisfied so long as negotiations were ‘conducted in good faith and with a view to obtaining agreement about the doing of the future act.’
Acting with a view to reaching agreement has a number of practical effects on the conduct and behaviour of a party. Initially, and as set out by President Dowsett in Gnulli at [16], the ‘question is not as to the adequacy of the latter party’s negotiation technique or strategy. The question is whether that party’s behaviour demonstrates that it has not negotiated in good faith’ with the ‘latter party’ in this case being the party whose conduct was alleged not to have been in good faith.
In relation to the Government party’s obligations, Placer (Granny Smith) sets out at [30] that:
‘[g]ood faith requires the Government party to act with subjective honesty of intention and sincerity but this, on its own, is not sufficient. An objective standard also applies. The Government and grantee parties’ negotiating conduct may be so unreasonable that they could not be said to be sincere or genuine in their desire to reach agreement.’
Similarly, it was observed in Brownley at [24] that:
The intention of Parliament is that a Government party engage in negotiation with a native title claimant with an open mind, willingness to listen, and willingness to compromise, to reach an agreement under which the native title claimant will agree to Government doing the act it proposes.
Lee J continues in Brownley at [25] by setting out that:
If a Government party ignores the requirement of the Act and seeks to exercise power without considering, and responding to, any submissions put to it by a native title claimant, relevant to the matters referred to in s 39, it will not be negotiating in good faith. Similarly, if a State purports to engage in negotiation, but, in truth, its conduct serves an ulterior and undisclosed purpose antithetical to the making of an agreement with a native title claimant, it will not be negotiating in good faith. Delay, obfuscation, intransigence, and pettifoggery would be indicia of such conduct.
This of course means that a party can’t just go ‘through the motions’ with closed minds or rigid or predetermined positions (Cox at [24]), engage in disingenuous conduct (Cox at [25] and [26]) or fail to advance negotiations by way of deliberate delay, sharp practice, misleading negotiation or some other type of unconscionable conduct (Cox at [27]) or with no intention of reaching agreement and then seeking arbitration (Xstrata at [59] citing White Mining at [33]).
Importantly as to this last point, this is ‘not evaluated on the basis of the “status”, “stage” or “substance” of negotiations’ but on conduct’ (White Mining at [33]). The overall effect of this is that it is not necessary for negotiations to have reached a particular stage in order to demonstrate good faith. Again Cox explains at [19] that:
the act of lodging an application under s 35, taken alone, cannot be relied upon in order to establish bad faith in the negotiating process (Strickland at 322). If negotiations reach a standoff, notwithstanding attempts in good faith to negotiate within the relevant six month period, there are no further obligations after the completion of the six month period on a party which wishes to lodge a notice under s 35 of the Act. There is no need, for example, to give further warning of the intention to do so.
Effectively, the exercise of the grantee party’s statutory right to seek a determination after the six month period has elapsed cannot be seen to show a want of good faith. Rather, it is the conduct of the parties and the quality of the process undertaken that is taken as indicating whether good faith is lacking.
It is accepted that when seeking to understand whether a party has conducted itself in good faith it is their overall conduct that must be scrutinised (see for example Njamal at [67], Strickland at [38] and Brownley at [35] and [37]). In Njamal at 17 - 18 a set of indicia were proposed to assist in forming an understanding of whether a party (a Government party in that case) had acted in good faith. These are included in Strickland at [35] with apparent endorsement and they are routinely adopted in determinations of this type, including in this one.
It must be noted that the Njamal indicia are indicia rather than principles and are not exhaustive. Member Lane at [85] in Dimer outlines an appropriate approach, setting out that the Njamal indicia aren’t a checklist or series of conditions. It is not necessary for the parties to engage in all the activities described and failure to engage in one or more parts of the indicia will not lead the Tribunal to a finding of a want of good faith. Equally, there may be other indicators that show principles of good faith have not been adhered to. One example provided by Nicholson J in Strickland at [38] is that negotiation in good faith does not mean a party has an obligation to accept or capitulate to another party’s position.
It is also accepted that the assessment of the overall conduct of a party is to be taken in context with the particular matter and its associated facts and will be affected by this context. As set out in Xstrata at [65]:
When determining whether the parties have negotiated in good faith, a contextual evaluation is required. The approach taken by one party is normally influenced by the approach taken by, or the conduct and actions of, another. The obligation to negotiate in good faith applies to all parties, so the Tribunal will not ignore the relevant actions of others when assessing the negotiation conduct of the party being challenged. For example, as the passage in Placer (Granny Smith) quoted above [Placer (Granny Smith) at [30]] indicates, lack of good faith in the negotiations by a native title party will be relevant to whether other parties have fulfilled their obligation and may impose a lesser standard on them. Similarly, if a grantee party is a small miner with few resources and limited capacity to make offers or give concessions in relation to a small project, what would be regarded as negotiating in good faith could be different from that of a large mining company with the capacity to make substantial offers and concessions in relation to a large project (see [Drake Coal at [85]]).
In making a determination, s 36(2) provides that if a party satisfies the Tribunal that another party has not negotiated in good faith, then it must not make a determination on the s 35 application. In terms of good faith, the Tribunal has held that the practical effect of this is that the evidential burden of demonstrating a lack of good faith rests with the party making the allegation. This is perhaps best summarised in Gulliver at [10] (citing Dempster at [4], [21] and Placer (Granny Smith) at [21]-[28]) which says:
The Tribunal has said that the practical effect of s 36(2) is to place an ‘evidential burden’ on the party alleging lack of good faith negotiations which would normally require it to produce evidence to support its allegations. The Tribunal is not required to adopt strict rules on burden of proof but any party alleging a lack of good faith negotiations must provide contentions and documents which specify in detail the matters it relies on.
It is clear that the quality of the conduct of the Government party is what I must look to in assessing the native title party’s allegation that the Government party has failed to negotiate in good faith. It is also clear that the evidential burden of providing sufficient evidence to substantiate this allegation falls upon that party making the allegation, i.e. the native title party. The principles I have outlined provide guidance to me as I proceed to carry out this assessment.
The leases and Summary of the APL’s Project
The leases are mining leases to be granted pursuant to s 75 of the Mining Act 1978 (WA) (Mining Act). Pursuant to s 78 of the Mining Act the leases would be granted for a period of 21 years, after which they may be renewed. The rights of the holder of the leases are set out in s 85 of the Mining Act and are subject to the Mining Regulations 1981 (WA) and any endorsements and conditions the State proposes to impose on the leases.
The mining lease applications form a portion of the larger Lake Wells Suphate of Potash project proposed by APL. Already APL has been granted a number of mining leases over the larger portion of the project footprint through mining leases M38/1274, M38/1275 and M38/1276. These look to have been granted in 2018 at around the time the Waturta claim was registered and are not subject to this determination.
Material provided by APL states that the company ‘intends to develop a borefield to pump hyper-saline brines’ from the aquifers in the area ‘into a series of large, shallow evaporation ponds.’ These ponds are sequential, with each pond crystallising salts of varying compositions with the final ponds precipitating enriched potassium salts. These salts are then processed into sulphate of potash with intended sale to fertiliser distributors.[1]
[1] APL Document 4, p 7.
From APL’s material provided, it appears M38/1287 is intended to be utilised for a significant portion of the evaporation pond complex in addition to a small portion of the projects bore field and pipeline. It appears both M38/1288 and M38/1289 are proposed to be mainly for bore field and pipeline purposes.[2]
[2] Ibid, p 17.
Summary of Waturta’s allegations regarding good faith
Waturta make a number of assertions which they contend should satisfy me that the Government Party failed to negotiate in good faith.
The Waturta contentions state that the Government party ‘merely went through the motions without any real intention to negotiate the terms of the State Deed’ (at [38]), adopted a rigid, non-negotiable position that was not aimed at reaching an agreement (at [39]) and adopted an unexplained and unnecessarily rigid approach (at [40]).
Further to this, at [42] of their contentions Waturta argue that the Government party did not engage ‘with an open mind, willingness to listen, and willingness to compromise, to reach agreement under which the Native Title Party will agree to the Government party doing the Act it proposes.’ Waturta also assert at [43] of their contentions that the Government party failed to make counter proposals as contemplated in Strickland which, it says, amounts to unsatisfactory conduct as referred to in Cox at [27].
The Good Faith Negotiation Period
As the allegation of a lack of good faith is made against the Government party, this section will focus mainly on steps taken by and interactions between Waturta and the Government party, although actions of APL are relevant.
Following notification, the Government party via the Department of Mines, Industry Regulation and Safety (DMIRS) sent correspondence to Waturta and APL on 10 September 2020 (the ‘10 September correspondence’) setting out requirements of the NTA and to affect an exchange of information to commence the negotiation process. In this correspondence the following was set out:
State Deed
Should the parties succeed in reaching an agreement for the grant of the tenement following negotiations, the Government party requires the execution of a State Deed before it will grant the tenement. A State Deed is an agreement of the kind mentioned in s 31(1)(1) of the NTA for the purposes of s 28(1)(f) of the NTA, and is required to be executed by each of the negotiation parties. A State Deed may complement a commercial agreement reached between the grantee party and the native title party or parties.
As and from 9 November 2015, the Government party has adopted a new template State Deed for the grant of mineral titles in Western Australia which replaces the earlier template. The new template State Deed is available on the website of the Department of Mines, Industry Regulation and Safety. The new template State Deed makes clear that the Government party is not liable for any compensation payable to native title holders in respect of the grant of mineral titles in light of s 125A of the Mining Act 1978 (WA) and s 24MD(4)(b)(i) of the NTA.[3]
[3] Waturta Document A.
In providing the requested information to Waturta, on 30 September 2020, APL provided a set of documents outlining the project and programme of work. In the covering correspondence APL’s representative, Mr Green, stated:
4.2 I note the GVP’s letter refers to the GVP having “adopted a new template State Deed for the grant of mineral titles in Western Australia”.
4.3 I would be grateful if the GVP could circulate a copy of the “new template”, and further if the NTP could confirm there is nothing contained in the “new template” which might present an obstacle to the NTP agreeing to the grant of the Tenements.[4]
[4] APL Document 4, p 5.
On 15 October 2020, APL made a request to the Tribunal for the provision of mediation assistance after which a preliminary mediation conference was convened on 12 November 2020. This was attended by representatives of all three parties with DMIRS representing the Government party at this point. A further mediation date was agreed for 1 December 2020.[5]
[5] APL Document 6.
Prior to this second mediation Waturta corresponded with the parties and the Tribunal requesting a two day mediation in Kalgoorlie on 1 and 2 December (or in the week of 7 December) and requesting more detailed mapping from the Government party. Waturta also set out a proposed timeline for the matter: the mediation in early December, exchange of a draft agreement in late December/early January leading to Waturta authorising an agreement in late January and agreement execution in early February.[6] It must be noted that I interpret this an expression of Waturta’s aspiration rather than being an agreed timeline by the parties, but it does seem to indicate a view to reaching agreement on the part of Waturta.
[6] APL Document 7.
The parties agreed to the conduct of the mediation over 2 days in Kalgoorlie on 1 and 2 December and on 26 November 2020 the State provided a set of maps as requested by Waturta.[7] Later on 26 November 2020 Waturta requested mapping with further detail which was provided by the State on 30 November 2020.[8]
[7] APL Document 9.
[8] APL Documents 10, 11 and 12.
Of significance, in the lead up to the December mediation, a short pre-mediation preparation teleconference was conducted on 27 November 2020. In the summary email provided to the parties from the Tribunal and to this inquiry by APL,[9] it is noted that:
Ms Plandowski advised that the native title party has a question for the State in relation to the operation of clause 4.1 in the State Deed, relating to compensation. Ms Lehmann-Bybyk advised that she was not in a position to answer the question at the time. Ms Plandowski noted that she would put her query in writing for the State, requesting that this could be responded to prior to the meeting with her client on Monday afternoon, if possible. Ms Lehmann-Bybyk advised she would need to take advice on any such request and it was unlikely any response would be available in time for the mediation.
[9] APL Document 13.
This account was not contested by the parties following its distribution.
As was proposed by Waturta, mediation occurred on 1 and 2 December in Kalgoorlie with the Government party being represented by DMIRS. The synopsis developed by the Tribunal was lodged in this inquiry by APL, with the broad reflection being that it appears to show that progress was made between Waturta and APL.[10] It also reflects that a single party session with Waturta was convened on 2 December in which ‘a separate mediation session was requested to discuss with the State issues around the State Deed’ but that ‘[t]hese issues were not outlined in the single party session’.[11] As evidenced by further materials, this separate mediation session was organised to occur on 22 January 2021.
[10] APL Document 15.
[11] Ibid.
Given the changed focus onto the State Deed, in a communication to Waturta dated 14 January 2021, Mr Domnhall McCloskey set out that the State Solicitor’s Officer (SSO) had been briefed to act for the Government party and that he was the officer allocated.[12] In this communication Mr McCloskey quotes the passage from the mediation conference synopsis quoted in the above paragraph.
[12] APL Document 16.
In their reply on 18 January 2021 in preparation for the 22 January mediation, Waturta notes that ‘[i]t is our understanding that it appears to be the Government’s position thus far that ‘Clause 4 Compensation’ cannot be changed in the State Deed’. Waturta then set out this clause 4 of the State Deed and provides an alternative which is the compensation set off clause (clause 6) of the Northern Territory State Deed (NT State Deed) (detailed in the following section). Waturta then makes a formal request for the deletion of the current clause 4 and replacement with a compensation set off clause such as that contained in the NT State Deed.[13]
[13] Waturta Document B.
As set out in the 22 January 2021 mediation synopsis provided by APL, following discussion on the matter of the State Deed, the main outcome of this mediation appears to be that the Government party agreed that it would respond to questions raised by Waturta by what is recorded as Friday 29 November 2020 in the synopsis but is assumed to mean Friday 29 January 2021, with Waturta to respond in kind by approximately 12 February 2021.[14]
[14] APL Document 28.
Following this, an exchange of correspondence occurred between the Government party and Waturta which gives rise to much of the substance of this inquiry and ultimately, the allegation of lack of good faith against the Government party.
The State Deed
As previously set out, the main issue this matter revolves around is the drafting of the State Deed and the impact this may have on the rights of native title claimants or holders to claim compensation for the loss of native title rights. As set out in paragraph [48] of these reasons, information on the State Deed formed part of the foundation of the negotiation period following notification in the form of the 10 September correspondence from the Government party.
The particular clause which gives rise to the issues examined in this determination is clause 4. This reads as:
4. COMPENSATION
4.1 Government Party not liable for Compensation
The Native Title Party and the Grantee Party agree that the Government Party is not liable for any compensation that the Native Title Party, members of the Native Title Claim Group or an persons determined to be common law holders of native title in relation to the Subject Area may be entitled to in respect of the grant by the Government Party of the Tenements(s) or the exercise by the Grantee Party of its rights and obligations under the Tenement(s).
4.2 Deed may be pleaded
(a) The Native Title Party agrees that it will not make any claim for Compensation nor will it authorise any other person to bring such a claim against the Government Party in respect of the effects of, or the exercise of any right or obligation created by, the grant of the Tenements(s) on any native title in relation to the Subject Area.
(b) If:
(i) the Native Title Party;
(ii) any person on behalf of the whole or part of the Native Title Claim Group; or
(iii) in the event there is an approved determination of native title that native title exists in relation to any part of the Subject Area, the registered native title body corporate,
makes a claim for Compensation against the Government Party, the Government Party may plead the terms of this deed in bar of that claim.[15]
[15] Waturta Document C.
As referred to in paragraph [53] of these reasons, issues around clause 4 of the State Deed were noted in the summary of the preliminary teleconference in the lead up to the 4 December 2020 mediation. Also as observed previously, this is further reflected in the synopsis of that mediation in Kalgoorlie which recorded that:
At the single party session of December 2 with the native title party, a separate mediation session was requested to discuss with the State issues around the State Deed. These issues were not outlined during the session. The Tribunal indicated they could arrange such a mediation once the State were able to advise when it could be present with its legal advisors.[16]
[16] APL Document 15, p 4.
In the 14 January 2021 correspondence from Mr McCloskey (from the SSO) it was set out that ‘I would like to hear … at your earliest convenience as to your client’s concerns or proposals to be put to my client at the next mediation session’,[17] the mediation session being scheduled for 22 February.
[17] Waturta Document B.
In their reply email of 18 January, Waturta outlined that they would like to formally discuss clauses 4, 9, 10.2 and recital F of the State Deed with the Government party and APL. As mentioned previously, Waturta state that ‘[i]t is currently our understanding that it appears to be the Government’s position thus far that ‘Clause 4 Compensation’ cannot be changed in the State Deed’ before reproducing clause 4 in the email.
Waturta continue by stating that ‘it is also our understanding that there is no legal requirement for a State Deed to contain a clause whereby the Government Party is not liable for Compensation’ and as mentioned, provide the example of an equivalent clause in the Deed (known as the ‘Generic Tripartite Deed’) used by the Northern Territory Government.[18] This clause was reproduced in the Waturta reply email and reads:
[18] Ibid.
Compensation to be set off
6. (a)This clause 6 applies if the Native Title Claim Group or any member of the Native Title Claim Group:
(i) receives or is entitled to receive from the Grantee Party or any other person any compensation, benefit or consideration ("compensation entitlement") whether under any ancillary agreement or otherwise; and
(ii) makes any claim for compensation, damages or other relief whatsoever against the Government Party or any office or agency of the Government Party or any other party ("compensation claim")
in connection with the grant of the Interest including its renewal and/or the Grantee Party exercising its rights or discharging its obligations which take place on the land and pursuant to the Interest and its claimed effect on any native title rights of the Native Title Claim Group or any member of the Native Title Claim Group, whether the compensation claim arises under the Native Title Act or the NT legislation.
(b) The Native Title Party agrees that a compensation entitlement referred to in (a) is to be taken into account in determining any compensation claim with respect to the grant of the Interest and is to be set off against such claim whether that claim is determined by agreement of the parties or by the National Native Title Tribunal or a Court or other Tribunal or body having jurisdiction or power to make a determination in relation to the compensation claim.
(c) The Native Title Party, the Land Council and the Grantee Party agree that at the request of the Government Party they:
(i) will provide full particulars, including a statement of account, of the compensation entitlement; and
(ii) produce for inspection and copying any document relating to the compensation entitlement including without limitation any ancillary agreement.
(d) The Grantee Party agrees that it will fully indemnify the Government Party in respect of any compensation claim made by the Native Title Party against the Government Party arising from or related to the grant of the Interest its renewal and/or the exercise of rights or conduct of operations thereunder.[19]
[19] Waturta Document B.
As a result of this alternative framing in the NT State Deed, Waturta asserts that:
‘the compensation term in a State Deed is a term that may be negotiated with the Government Party by the Native Title Party, and there is alternative drafting – specifically in reference to a compensation set off – that may be included in the current State Deed being proposed by the Government Party.’[20]
Waturta then sets out that they:
makes a formal request of the Government Party, as a part of these negotiation that:
·Clause 4, Compensation in the State Deed be deleted;
and
·be replaced with a ‘compensation set off’ clause similar to that in clause 6(a) to 6(c) of the Northern Territory State Deed.[21]
[20] Ibid.
[21] Ibid.
This issue was then discussed at the mediation session on 28 January with Waturta and the Government party agreeing to exchange correspondence on clause 4 issues and APL noting APL may also have comments in regard to any proposed amendments.[22]
[22] APL Document 20, p 2.
In a letter delivered by email from the Government party to Waturta and cc’d to APL on 29 January, the Government party set out that:
… I confirm advice provided at the mediation that the Government Party will consider an amendment of the draft State Deed referred to in its letters of 10/9/2020 to Waturta and Australian Potash. This is consistent with what I understand is the long-standing position of the Government Party detailed in its 'Guidelines for Completion of State Deed (Deed for Grant of Mining Tenement).' In an email sent on the morning of 22/1/2021, I provided a link to the URL where the Guidelines could be found and a PDF copy of the same. The first paragraph of the Guidelines provides:
The Minister for Mines and Petroleum (or his representative) will execute the Deed only in the form as supplied to the parties by the Department of Mines, Industry Regulation and Safety (DMIRS) and after execution by all other parties to the Deed. In exceptional circumstances, if the parties need to alter the basic document, then they should discuss the desired alterations with DMIRS before altering or signing the need [sic].
Thus, in this case, as in all other relevantly similar cases, the Government Party is, as noted above, willing to consider altering or amending its 'basic document' in an appropriate case. Accordingly, the Government Party invites you to provide information as to why it is appropriate to alter the State Deed in the circumstances of this particular case.
I turn now to clause 4 of the State Deed. As noted above, the email of 18/1/2021 proposed the clause 'be replaced with a 'compensation set off' clause similar to that in clause 6(a) to 6(c) of the Northern Territory State Deed.' At the mediation Shzan sought information as to the basis upon which the Government Party thought it appropriate to rely on a clause like clause 4 of the State Deed. Put shortly, and in response to that request for information, the basis was first outlined by my instructing department at page 3 of its letter of 10/9/2020 to your client and by the lawyer for the grantee party (Ken Green) during the course of that part of the mediation in which the said clause 4 was discussed. I confirm that it is the Government Party's view that it is appropriate for the Government Party to rely on clause 4 of the State Deed when regard is had to subparagraph 24MD(4)(b)(i) of the NTA and to section 125A of the Mining Act 1978 (WA). The former provision provides, in effect, that where a relevant act is attributable to a State and a law of that State provides that a person other than the Crown in any capacity is liable to pay compensation, that person is liable to pay compensation to affected native title holders. Relevantly, the latter provision (section 125A) is a provision of the kind referred to by the former provision.
That latter provision provides that 'the person liable to pay the compensation is …the applicant for the grant of, or the holder of, the mining tenement.' In this State, therefore, the Government Party bears no liability for the payment of compensation to native title holders in circumstances those such as that exist in this case. Further, in such circumstances, it also seems clear the law regarding payment of compensation in the Northern Territory is different than the law in this State.
If you disagree with the views expressed in the previous two paragraphs, please provide submissions outlining why this is so and, more broadly, why your client asserts that clause 4 of the State Deed should be replaced in the manner outlined in the email of 18/1/2021 and/or at the mediation (if there is a difference between the positions outlined in the email and at the mediation).[23]
[23] Waturta Document D.
Waturta’s response dated 5 February 2021 sets out the scheme of the legislation through s 24MD(4) of the NTA and s 125A of the Mining Act and notes at [4] that as a result of these clauses:
‘the Grantee Party, not the Government Party, has the liability to pay native title compensation for an act in relation to Section 26(1)(c)(i) of the Native Title Act in the event that a native title compensation claim is made.’[24]
[24] Waturta Document E.
The effect of these sections seem not to be in question by Waturta, rather Waturta emphasises their view of the effect of the State Deed by setting out at paragraph 6 in relation to clause 4.2 of the State deed that:
The Native Title Party agrees that it will not make any claim for Compensation [our emphasis]…
and that:
the Government Party may plead the terms of this deed in bar of that claim [our emphasis][25]
[25] Ibid.
Waturta effectively sets out the view that that the phrase ‘will not make any claim for Compensation’ is to be read by itself and taken literally. As a result of this view, Waturta then says that:
7. As we understand it the purpose of clause 4 of the State Deed is to bar a native title compensation claim from being made by the Native Title Party.
8. Therefore, the result of the Native Title Party entering into the State Deed in its current form would be:
a) pursuant to clause 4.1 and clause 4.2 of the State Deed, the Native Title Party contracting out of its right to make a native title compensation claim; and thus
b) the Grantee Party not being liable for the payment of any resulting, determined native title compensation.
9. For this reason, and as provided in our e-mail to you dated 18 January 2021 and discussed at the Mediation, we have requested an amendment to clause 4 of the State Deed. The proposed amendment would be to include a term similar to the compensation clause in the Northern Territory State Deed, whereby:
a) the Native Title Party would retain their right to make a native title compensation claim; but
b)any native title compensation paid by the Grantee Party under the Ancillary Agreement would be set off against any future native title compensation claim made by the Native Title Party.
10. If the current Clause 4 of the State Deed is not amended to include a set off term, then the Native Title Party will lose their legal right to:
a) make a native title compensation claim pursuant to the Native Title Act; and
b) to receive any resulting, determined native title compensation pursuant to section 24MD(4)(b)(i) of the Native Title Act and Section 125A of the Mining Act.[26]
[26] Ibid.
In its response dated 11 February 2021 the Government party says:
It seems to the State that because the reasoning in [7] – [10] of your letter does not acknowledge or proceed from the conclusion in [4] of your letter, the reason advanced for the replacement of clause 4 of the State Deed with the compensation clause in the Northern Territory State Deed mischaracterises the effect of clause 4 of the State Deed, particularly at [8] and [10] of your letter. While clause 4 of the State Deed does, in short, record the agreement of the Native Title and Grantee Parties "that the Government Party is not liable for any Compensation", it does not deprive the Native Title Party of the ability to claim compensation against any other party. That fact was recognised in your letter at [4]. Because the only apparent basis for asserting that clause 4 of the State Deed should be replaced is based on an incorrect premise, the State is not persuaded to accept your client's suggestion to replace the said clause 4. If you have anything further to put to the State on this question, however, please do so at your earliest convenience.
In addition, as to your suggestion that clause 4 of the State Deed be, in effect, replaced by a clause similar to the compensation clause in the Northern Territory State Deed, you have not explained how a clause, which is predicated on the ability to make a "claim for compensation, damages or other relief whatsoever against the Government Party," can or should be given effect in the circumstances that exist in this State in light of the existence and effect of section 125A of the Mining Act. In the absence of any such explanation, the State is not likely to agree to such a course of action. Again, if you have anything further to put to the State on this question, however, please do so at your earliest convenience.[27]
[27] Waturta Document F.
In my view the interpretation that ‘because the reasoning in [7] – [10] of your letter does not acknowledge or proceed from the conclusion in [4] of your letter’ does not accurately represent the point Waturta is seeking to convey. I am of the view that a more correct interpretation would be that at paragraph [4] of their 5 February correspondence, Waturta is simply acknowledging that the effect of s 24MD(4)(b)(i) of the NTA and s 125A of the Mining Act is to make the grantee party liable for compensation. Waturta however, then puts forward the argument at [7]-[10] of their correspondence that despite this, the effect of clause 4 of the State Deed would be to preclude a native title party from seeking any compensation from any party, including a grantee party in addition to the Government party.
The Government party goes on to say that as a result of this ‘the reason advanced for the replacement of clause 4 of the State Deed with the compensation clause in the Northern Territory State Deed mischaracterises the effect of clause 4 of the State Deed’ and that ‘[b]ecause the only apparent basis for asserting that clause 4 of the State Deed should be replaced is based on an incorrect premise, the State is not persuaded to accept your client's suggestion to replace the said clause 4.’
I am not convinced this is the premise Waturta is seeking to convey, but rather that the drafting of Waturta’s 5 February correspondence has been misunderstood by the Government party or that the Government party is presenting a misdirection. Despite this, the Government party is clear in its view that clause 4 of the State Deed ‘does not deprive the Native Title Party of the ability to claim compensation against any other party’.
Unfortunately the Government party further states that Waturta have not explained why clause 4 of the State Deed should be replaced with a similar clause to the NT State Deed given the effect of s 125A of the Mining Act, and that ‘in the absence of any such explanation, the State is not likely to agree to such a course of action’ when in fact Waturta had provided this explanation.
As mentioned, it is difficult to discern whether the statements of the Government party are a misdirection by the Government party representative or whether it is a genuine misinterpretation of Waturta’s point. Waturta’s position seems clear enough on my reading, but I acknowledge there could be a lack of clarity in the drafting of Waturta’s 5 February correspondence.
Further to this and on matters of interpretation, while I am of the view that the meaning being conveyed by Waturta is relatively clear, there must be openness to forming the conclusion the Government party’s statements may have been misinterpretation rather than misdirection given the issue at play is itself a difference in opinion regarding the interpretation of the operation of clause 4 of the State Deed.
Following the response of the Government party, Waturta seek to clarify this in the response dated 22 February 2021 in which it sets out that:
4. For the avoidance of doubt, our letter at [4] did not recognize or concede that clause 4 of the State Deed does not deprive the Native Title Party of the ability to claim compensation against any other party. Our letter at [4] simply stated the Government Party’s position.[28]
[28] Waturta Document G.
Waturta then state that:
8. The Government Party’s position at paragraph 4, page 1 of the 11 February Government Party Letter is that Clause 4 ‘does not deprive the Native Title Party of the ability to claim compensation against any other party’
9. However, the literal wording of the terms of Clause 4.2 of the State Deed being:
• “The Native Title Party agrees that it will not make any claim for Compensation”; and
• “If the Native Title Party …makes a claim for Compensation against the Government Party, the Government Party may plead the terms of this deed in bar of that claim”,
do in actuality, deprive the Native Title Party of the ability to make a claim for compensation against any party, including the Grantee Party.
10. Therefore, our response to paragraph 1, page 2 of the 11 February Government Party Letter in which it is stated:
Because the only apparent basis for asserting that clause 4 of the State Deed should be replaced is based on an incorrect premise, the State is not persuaded to accept your client’s suggestion to replace the said clause 4.
is that the premise we provided is correct and the State should have accepted our client’s request to amend clause 4.
This effectively confirms Waturta’s view that clause 4.2(a) should be read in two separate parts and, irrespective of the operation of s 24MD(b)(i) of the NTA, s 125A of the Mining Act and the Government party assertion that clause 4 of the State Deed does not need amendment due to their operation, that:
section 125A of the Mining Act is not the mechanism by which the Native Title Party may make a native title compensation claim against a Grantee Party. At any rate, such a claim for compensation would currently not be possible due to the effect of the current wording of clause 4.2 of the State Deed.[29]
[29] Waturta Document G, [12].
Waturta then raise a new issue relating to the compensation clauses around s 125A(1), quoting the section as follows:
Section 125A of the Mining Act
(1) If compensation is payable to native title holders for or in respect of the grant of a mining tenement, the person [our emphasis] liable to pay the compensation is —
Waturta goes on to say:
14. In relying on Section 24MD(4)(b)(i) of the Native Title Act and section 125 of the Mining Act, the Government Party makes an assumption that a ‘person’ will exist in order to be liable for native title compensation. However, it is foreseeable that the ‘person’ being a natural person may be deceased or a legal person (e.g. such as a corporate entity) may cease to exist.
15. In such a situation if the Native Title Party is barred from making a native title compensation claim against the Government Party because the Native Title Party entered into the current form of the State Deed, there will be no ‘person’, natural or corporate, that is liable for native title compensation.
16. Our client has a legal right to make a native title compensation claim and it is concerning that the Government Party continues to require the Native Title Party to opt out of this legal right with no consideration.
By this time however, the future act determination applications were lodged with the Tribunal on 14 February 2021 and subsequently accepted on 19 February 2021. Although they were able to continue, negotiations did not proceed beyond this point and as such no formal response to Waturta’s 22 February correspondence was provided by the Government party.
Commentary on the State Deed
In terms of the effect of clause 4 of the State Deed, I do not agree with the assertion of Waturta that clause 4.2(a) be read in two parts. Rather, I am of the view that it should be read as one passage and that its meaning is that a native title party won’t make a claim for compensation against the Government party and neither will it authorise any other person to make a claim for compensation against the Government party on its behalf.
When arriving at this view, I have worked through what I believe to be the construction of the clause and the materials which build this construction. In the first instance, the 10 September correspondence from the Government party which states the ‘new template State Deed makes clear that the Government party is not liable for any compensation payable to native title holders in respect of the grant of mineral titles in light of s 125A of the Mining Act and s 24MD(4)(b)(i) of the NTA.’
As explored previously, s 24MD(4)(b)(i) of the NTA sets out that in an act attributable to the Government party, a party other than the Crown is liable for compensation should the State have a law that provides this. In this instance, and as the Government party asserts, the law that provides this is s 125A of the Mining Act. In my view and as the Government party asserts, these sections form part of the construction of clause 4 of the State Deed by making it clear that it is not the Government party that is liable for compensation once the act is done, but rather it is a grantee party, in this case APL.
Clause 4.1 of the State Deed itself says the ‘Native Title Party and the Grantee Party agree that the Government Party is not liable for any Compensation that the Native Title Party … may be entitled to in respect of the grant’. While this does not overtly state a grantee party is liable for compensation it would be reasonable to assume this, given the passage does include the grantee party in the acknowledgement of non-Government party liability. This is in addition to the asserted construction of this clause being based on satisfying s 24MD(4)(b)(i) of the NTA and s 125A of the Mining Act, in which it is explicit.
As an extension of this, it is in my view reasonable that clause 4.2(a), that is that the ‘Native Title Party agrees that it will not make any claim for compensation nor will it authorise any other person to bring such a claim against the Government Party’ be read together with the words ‘against the Government Party’ qualifying the entire passage.
This is in effect the stance of the Government party where, at [16] of its contentions, it sets out in relation to Waturta’s 29 January letter that:
16. The GVP was of the view on receipt of the letter that the construction of the sub-clauses asserted therein by the NTP did not reflect their meaning and effect. It remains of the view that the construction asserted in the letter is incorrect and that the proper construction of the subclauses is that advanced by the GVP, including in its Letters dated 29/01/2021 and 11/02/2021. The proper construction of clause 4 of the State Deed reflects the interaction of s 24MD(b)(i) NTA and s 125A of the Mining Act and importantly perhaps, and contrary to the assertions by the NTP, does not prevent the NTP from seeking Compensation from the GP.
APL shares the views I have described here in its contentions where it states that:
8.12 In short, the NTP’s interpretation of clause 4.2 of the GVP’s State Deed (as per the NTP’s letter dated 5 February 2021) includes that the following words should stand alone and operate independently of the balance of that clause:
The Native Title Party agrees that it will not make any claim for Compensation.
(NTP Interpretation).
8.13 By way of contrast, the GP says that the correct interpretation of clause 4.2 of the GVP’s State Deed is that the words “will not make any claim for Compensation” (shown above by single underlining) are qualified by the words “against the Government Party in respect of the effects of, or the exercise of any right or obligation created by, the grant of the Tenement(s) on any native title in relation to the Subject Area” (shown above by double underlining) (GP Interpretation) [original emphasis].[30]
[30] APL Contentions.
In setting out its reasons for this conclusion APL makes the contention that:
8.20 That the NTP Interpretation is unlikely [original emphasis] correct is supported by the following:
(1)by way of context, the Negotiation Parties are endeavouring to reach agreement, for the purposes of s 31(1)(b) of the NT Act, as to the doing of certain future acts. As such, the State Deed contemplates that those certain future acts will be listed in the Schedule to the State Deed.
However, if the words:
The Native Title Party agrees that it will not make any claim for Compensation.
are to stand alone and operate independently of the balance of clause 4.2(a) of the GVP’s State Deed, then they are unqualified as to relevant future acts, and relevant grantee parties.
That is, the interpretation proposed by the NTP:
(a) ignores that the State Deed deals with specific future acts (listed in the Schedule to the Stated Deed); and
(b) invites the consequence that pursuant to clause 4.2(a) of the State Deed, the NTP foregoes native title compensation:
(i) for each future act specified in the Schedule to the State Deed; and
(ii) every other future act, whether past or future.
That is literal effect of the words: “The Native Title Party agrees that it will not make any claim for Compensation”.
An interpretation having such a material and surprising consequence is unlikely to be attributed to the parties by an objective outsider in the circumstances.42 The GP says such objective outsider will be more inclined to adopt the GP Interpretation.
The interpretation proposed by the NTP is not to be preferred;
(2)by way of context, clause 4.2(b) of the State Deed is expressly limited to claims for compensation made against the GVP. Given the respective natures of clauses 4.2(a) of the State Deed (a promise not to claim) and 4.2(b) of the State Deed (a right to plead in bar of a claim), an objective outsider would infer that the parties intended those clauses to mirror the extent they affect the NTP. A promise not to claim, and a right to plead in bar of a claim, are commonly “paired” to address a single liability.
However, the interpretation proposed by the NTP means clause 4.2(b) of the State Deed has limited work to do (it being expressly limited to the GVP and to the tenements listed in the Schedule to the State Deed), whilst clause 4.2(a) of the State Deed operates disproportionately in respect of all future acts.
Again, the NTP Interpretation appears unlikely to be attributed to the parties by an objective outsider in the circumstances.43
The interpretation proposed by the NTP is not to be preferred;
(3)by way of context, the interpretation proposed by the NTP is contrary to the representation made by the GVP in its letter dated 10 September 2021,44 namely that:
The new template State Deed makes clear that the Government party is not liable for any compensation payable to native title holders in respect of the grant of mineral titles in light of s 125A of the Mining Act 1978 (WA) and s 24MD(4)(b)(i) of the NTA.
Notably, the GVP’s letter does not suggest that the new template State Deed somehow relieves the GP from liability for compensation payable to NTP in respect of mining tenements, or indeed that the new template State Deed has an en globo effect of denying any entitlement of the NTP to native title compensation.
8.21 In short, the GP says that to the extent the NTP’s dated 5 February 2021 expressed an interpretation of clause 4.2(a) of the State Deed, it did so:
(1) obscurely; and:
(2) incorrectly.[31]
[31] APL Contentions citing Cheshire and Fifoot’s Law of Contract, Ninth Australian Edition, p394 at [10.31] at [42] and [43], APL Document 3 at [44] and APL Document 23 at [45].
Although placed in different terms, for the reasons I have set out I agree with this interpretation. At this point however, it is worth noting that in its contentions, APL remarks upon the similarity between the NT State Deed and the pre-2015 WA State Deed. In doing this APL includes a copy of the pre-2015 WA State Deed and sets out that:
the NTP’s email sent 18 January 2021 overlooked that prior to 2015, clause 4 of the GVP’s State Deed was, in substance, the same as clause 6(a) to 6 (c) of the Northern Territory State Deed. In effect the NTP’s email sent 18 January 2021, requested to the GVP to revert from its current (post 2015) form of State Deed to its pre-2015 form of State Deed. [original emphasis] [32]
[32] APL Document 1.
The key difference between the pre-2015 WA State Deed and the current NT State Deed is the addition of a passage of the NT State Deed which places the effect of the clause beyond doubt at 6(d) which reads:
(d) The Grantee Party agrees that it will fully indemnify the Government Party in respect of any compensation claim made by the Native Title Party against the Government Party arising from or related to the grant of the Interest its renewal and/or the exercise of rights or conduct of operations thereunder.
It should also be noted that it would be generally expected that an agreement reached under s 31 of the NTA would be in satisfaction of any compensation requirements from the doing of the act, thereby removing the necessity for any future compensation claims against a grantee party. It would seem reasonable to conclude, given the inclusion of compensation offset clauses, that the current NT State Deed and the pre-2015 WA State Deed contemplate a situation where a s 31 agreement may not satisfy compensation requirements. It can’t be said that the post-2015 WA State Deed does not, however it is not as explicit.
Although this may be the case, it seems quite conceivable that a future compensation claim against a tenement holder may arise due to a native title party’s view that a s 31 agreement has become defective or deficient in some way, perhaps due to changes or developments in law or for other reasons. Faced with this situation, it seems equally conceivable that a grantee party will argue exactly as Waturta have suggested in this current matter, that the phrase the ‘native title party agrees it will not make any claim for compensation’ be read alone and be interpreted literally.
Further to this, while I may not agree with this interpretation in the present matter for the reasons outlined, this does not mean that a future court will hold the same view should this be argued before it in the context of a compensation claim or in circumstances where the law and interpretations may have evolved.
Simply highlighting this issue as Waturta have done may also give rise to some broader uncertainty in the current drafting of the WA State Deed. This may create a policy issue for the Government party being a lack of confidence in the effect and impact of the State Deed in relation to native title compensation, giving rise to a disincentive for native title parties to enter into it in future matters. If this issue does continue to arise there are likely to be simple drafting additions or amendments in the current form of clause 4 of the State Deed that overcome it.
The second issue raised by Waturta in their 22 February correspondence, that of the potential non-existence of the tenement holder, is not addressed in the State Deed or the Mining Act. Certainly s 125A(2) does specify what is to occur if the tenement has been cancelled or relinquished, which is that:
(2) If, at the relevant time, there is no holder of the mining tenement because the mining tenement has been surrendered or forfeited or has expired, a reference in subsection (1) to the holder of the mining tenement is a reference to the holder of the mining tenement immediately before its surrender, forfeiture or expiry.
However the circumstance where the grantee party as a corporate entity no longer exists or a natural person as tenement holder is deceased, is not contemplated. It would appear that in this circumstance there would be no recourse for the native title party to make a claim for compensation if they were of the view that any s 31 agreement reached had become defective or did not satisfy this.
Again it must be noted that it would be the general expectation that a s 31 agreement would satisfy any compensation requirements. It is not beyond the realms of possibility however that a native title party may find itself in a situation where the s 31 agreement it entered into is insufficient or defective for some unforeseen reason and the tenement holder no longer exists. Although expected to be relatively rare, if this circumstance were in fact to arise it is difficult to understand what the remedy for the native title party may be.
Funding
The second main issue raised in relation to whether the Government party engaged in negotiations in good faith revolves around costs and funds for the preparation of an amended State Deed. Specifically, in their 5 February correspondence Waturta set out:
Clause 10.2(a) – Costs and Duty
12. As discussed at the Mediation, the Native Title Party has incurred legal costs and disbursements in relation to the negotiation of the State Deed. This includes advice and representation necessary so that they may assert their rights and interests in relation to the clauses 4.1 and 4.2, as discussed above.
13. While the State has had access to significant resources to assert its rights and interests in this matter, the Native Title Party does not. For this reason, the Native Title Party requests as a part of this negotiation that clause 10.2(a) be amended to read as follows:
(a) subject to subclause 10.2(b), the Government Party will pay the reasonable legal costs and other expenses in connection with the preparation and completion of this deed.
Whereas the original 10.2(a) of the State Deed reads:
Subject to subclause 10.2(b), each Party will pay its own legal and other costs and expenses in connection with the preparation and completion of this deed.[33]
[33] Waturta Document C.
In its response on 11 February, the Government party states:
The second issue identified in your letter concerns costs: see [12] and [13] on page 4. In the latter paragraph it is asserted that, in effect, the difference in resources between the State and the Native Title Party justify amending clause 10.2(a) of the State Deed in the way described in that [13]. This is the only reason upon which this assertion rests. It does not identify a point of principle or relevant legislative provision - in particular, your letter does not point to anything in the Native Title Act to support the assertion, in particular section 31 of the Native Title Act. Nevertheless, if you would identify a principle or legislative provision upon which the asserted amendment is based, the State will, of course, consider the same.
In addition, the State does not accept that costs incurred in seeking to amend the State Deed in the circumstances of this case are costs that can be considered to be reasonably incurred. If your client disagrees on this point, please advise why that is the case.
Waturta responds in their 22 February correspondence:
Clause 10.2(a) – Costs and Duty
19. We refer to paragraph 3 on page 2 of the 11 February Government Party Letter. It appears that in a response to a request from the Native Title Party to pay for the reasonable legal costs associated with the negotiation and amendment of the State Deed the Government Party is asking the Native Title to justify this request with a reference to legislation.
20. This response from the Government Party to a request based on the economic hardship of the Native Title Party is disappointing. Many of the members of our client live below the poverty line. It is therefore customary and accepted practice for the Native Title Party to ask the other parties, who have more funding, to pay for the reasonable legal costs associated with the negotiation and amendment of any related agreement.
Again, the 22 February Waturta correspondence was provided after the s 35 applications were lodged so no response from the Government party was tendered as part of the negotiation process.
Waturta observe that the Government party did not consider the legal expenses incurred in seeking to amend the State Deed as being costs that were reasonably incurred (as set out in the Government party 22 February correspondence) and contend that this shows the Government party’s position ‘was a blanket refusal to engage, except to outline why they believed they should not have to engage.’[34] In response the Government party argues that:
31. As to amending clause 10.2(a) of the State Deed, the GVP also contends the NTP has also shown no reason the GVP should agree to amend clause 10.2(a) of the State Deed to agree to pay the costs described in the proposed amended clause. There are several reasons why this is so. Firstly, there is no provision in the NTA or other legislation justifying or authorising such payment; neither is there any principle justifying such payment. Relatively recent authority confirms there is no such obligation. The NTP did not identify any such legislation or principle when asked to do so.
32. Further, agreements to pay the legal costs of native title parties incurred in a NIGF process are likely to be entered into by a grantee party, being the party obtaining a direct commercial benefit from exploitation of the future act being negotiated, most commonly an applicant for mining tenure. Further, the GVP is in a different position in such circumstances, as it is in this case - its role is to itself comply with the NTA and to administer the Mining Act. This factor and the effect of s 125A of the Mining Act means that it would be at least unreasonable, if not improper, for the GVP to agree to the proposed amendment in the circumstances of this case in particular.[35]
[34] Waturta Contentions, [36].
[35] Government party contentions, [31] and [32] citing Gnulli.
APL also cites Gnulli at [99] and [100] as part of its contentions. From this it says that a proper construction of s 31(1)(b) and s 31(2) of the NTA does not require the Government party to negotiate or cover reasonable legal costs of Waturta and that it was not apparent that the costs incurred by Waturta were incurred reasonably as Waturta’s 18 January email lacked explanation and analysis, and Waturta’s 5 February letter didn’t properly articulate the Waturta’s interpretation of clause 4 of the State Deed and was in any case, was arguably misguided.[36]
[36] APL Contentions, [9.2] – [9.4].
I don’t agree that Waturta’s expenses were incurred unreasonably, there is a need for a legislative requirement for the Government party to fund Waturta or that the principle upon which the request was made is unclear. Still, as set out by President Dowsett in Gnulli at [99], ‘there is no absolute obligation on one party to negotiation to fund another party’.
Additionally the request was tied to drafting amendments of the State Deed itself so was enmeshed in the actual negotiations rather than struck as a parallel conversation on how the negotiations may have been assisted. In any case, per Strickland at [38], good faith does not require a Government party to capitulate to a position put to them.
From this, it must be noted that it is routine for grantee parties to provide financial assistance to native title parties in the negotiation of s 31 agreements however, as the Government party states in its contentions quoted above, the position of the Government party is somewhat different and while it would not be impossible to provide funding (presuming it existed) it would not have been as simple as for a grantee party as a private entity.
Did the Government Party fail to negotiate in good faith in relation to the State Deed?
The larger part of the contentions of the parties relate to the issues outlined previously and as to the proper construction of the previously discussed clauses in the State Deed. What remains is an analysis of the state of mind of the parties and whether this amounts to a lack of good faith as Waturta contend. On this topic Waturta contend that the Government party:
a)overall, acted unreasonably;
b)merely went through the motions with no real intention to negotiate the terms of the State Deed;
c)adopted a rigid, non-negotiable position and unnecessarily rigid approach and merely refused to depart from their original position;
d)refused to consider an adequate and reasonable alternative, instead taking the approach the State Deed would only be amended if Waturta could prove exceptional circumstances;
e)did not engage in negotiation with an open mind, willingness to listen, and willingness to compromise, to reach an agreement or to compromise; and,
f)failed to make counter proposals per Strickland (at [9]).[37]
[37] Waturta Contentions, [37] – [42].
Addressing these specific assertions, the Government party simply states that it:
‘rejects the validity of these assertions and contends, in short, that this aspect of the Determination Application is in issue before the Tribunal because there is a difference of opinion as to the proper construction of particular clauses of the State Deed held by the NTP on the one hand and by the GVP on the other, with the GP concurring with the opinion of the GVP.’[38]
[38] Government party Contentions, [26].
The Government party further sets out its view that it was reasonable to rely on what it believed was the correct construction of clause 4 of the State Deed and that failure to depart from this cannot be said to be a failure to negotiate in good faith.[39] The Government party also contends the basis of its position was clearly explained, that each piece of correspondence invited a response and that its view that a clear need to amend the State Deed was not justified given ‘the nature of the GVP and the need for it to act consistently with the laws of the state.’[40] The Government party then states:
‘there is no complaint as to the GVP’s conduct before the mediation of 22/01/2021 or otherwise in relation to the conduct of the negotiations thereafter.* (In fact, consideration of any possible concern about, e.g., the timing of this aspect of the NIGF process should reflect the relatively late stage in that process the NTP particularised its concerns as to the State Deed.)’[41]
[39] Ibid, [30.1].
[40] Ibid, [30.2].
[41] Ibid, [30.3] noting at * that this was carried out by correspondence thereafter.
The contentions of APL focus mainly on the interpretation of the State Deed, however in terms of the conduct of the parties APL refutes the central allegations against the Government party and focus mainly on the conduct of Waturta. On this APL says:
(1) the NTP did not raise its concern as to the GVP’s State Deed until very late in the negotiating period: see ¶8.2 above. The NTP did so notwithstanding the GP and GVP had invited the comments as early as September 2020: see GP Events 2 and 3;
(2) the NTP’s email sent 18 January 2021, whilst requesting an amendment to the GVP’s State Deed, failed to provide any justification for the amendment: see ¶8.3 above;
(3) the NTP was not prepared to discuss the matter at the Fourth Mediation: see 8.7(3) above, and further declined to express at the Fourth Mediation any particular interpretation of the GVP’s State Deed held by the NTP: see ¶8.8 above;
(4) the NTP’s letter dated 5 February 2021 lacked any robust analysis of the merits of the amendment sought by the NTP to the GVP’s State Deed. [42]
[42] APL Contentions, [8.28].
On point 3 above, APL asserts that at the fourth mediation conference on 22 January, that the representative of Waturta had not anticipated discussion on s 24MD(4)(b)(i) of the NTA and could not take discussion further, an event in which the APL representative expressed some surprise.[43]
[43] Ibid, [8.7].
In their reply, Waturta are vigorous in their refutation of this assertion of APL, particularly in that it insinuates a lack of preparation on the part of the Waturta representative. Waturta instead argue that their representative:
‘was not advised of the Grantee Party’s and the Government Party’s intent to discuss section 24MD(4)(b)(i) and once she was made aware of their intent, she advised them that she would need to consider that point of law and seek instructions. She replied to that point of law in subsequent communications with the State.’
And that:
‘…this is reasonable in all circumstances.’[44]
[44] Waturta Contentions in reply, [6] and [7].
Waturta further contend that:
‘the fact that the Government Party did not advise the Native Title Party that they wanted to discuss 24MD(4)(b)(i) of the Native Title Act is another factor indicating that the Government Party failed to negotiate in Good Faith.’[45]
[45] Ibid, [7].
I disagree with this statement of Waturta. While it would be more advantageous for the topics of a mediation to be known in advance, I am of the view that discussion around this section of the NTA and s 125A of the Mining Act should have been anticipated given it was a foundational point of the discussion, so it was likely both the Government party and APL were of the view that it did not need to be specifically raised in advance. Additionally, the position of the Government party on this matter was known in advance as a result of previous correspondence.
I also disagree with points 2 and 4 of APL’s contentions quoted at [114] above for similar reasons as outlined in the previous section dealing with the State Deed, that is, that in my view the reasoning of Waturta is clear enough although I do (as I have) acknowledge that its drafting may lead to misinterpretation.
These points are not central to this determination however. In my view the allegation of a lack of good faith cannot be fully made out on the basis of the lateness of the commencement of the State Deed discussion in the good faith negotiation period, the events occurred in a short time frame after this discussion commenced or as negotiation occurred through parties corresponding with each other rather than in a face to face mediation setting (a function of the timing of the discussion). Because of these things I cannot definitively conclude that the Government party failed to conduct itself in good faith.
I noted previously that it was difficult to discern whether the characterisation by the Government party of Waturta’s views in relation to clause 4 of the State Deed were a misinterpretation or a misdirection, with the inference being that if it was determined as a misdirection then it couldn’t be said the Government party conducted itself in good faith. In my view however, this could only be properly tested with further discussion and face to face mediation rather than through correspondence.
The exchange of views by correspondence had arrived at an impasse, which is common in a negotiation process. Unfortunately however there was insufficient time to test whether this impasse was due to a lack of mutual understanding or due to parties being fixed or unnecessarily rigid in their negotiation positions.
While an impasse was arrived at on the issue of the State Deed, the Government party had communicated freely, in a timely manner and had on each occasion invited the views of the parties in response. Additionally, it had been responsive to the requests of Waturta for other resources such as mapping and requests for mediations to be convened outside of Perth at a time and place convenient to Waturta.
I am also of the view that the parties exchanged information in the appropriate way and that the parties had worked to move the process forward in a manner that could be expected to be consistent with negotiating in good faith.
What did not occur, in relation to the Government party at least, was that there was not a process of counter proposal to advance matters. Waturta had made a proposal as to their views on how the State Deed could be modified, however the Government party did not take these on board or provide counter proposal. I am not persuaded by the view put forward by Waturta however, that this shows a lack of good faith. I would agree that it is part way there, however the s 35 applications were made at what I consider to be the exact point at which a further mediation conference could have either broken the impasse or more conclusively demonstrated whether the Government party was conducting itself in a manner which was merely a refusal to depart from its original position or, as was set out in Daniel at [47] that the Government party was ‘so unreasonable as to indicate that it is not sincere in its desire to reach agreement.’
As indicated here, I am in agreement with the statement made by the Government party, which is quoted at [113] of these reasons, that the process of discussing the State Deed crystallised towards the end of the minimum negotiation period required by the statute and because of this I cannot say definitively that the actions of the Government party show a lack of good faith.
Upon consideration of all the evidence laid before me in this matter, I do not believe Waturta have sufficiently demonstrated the Government party failed to negotiate in good faith when considered in the overall context of the negotiations in this matter.
DETERMINATION
I am satisfied the Government party negotiated in good faith as required by s 31(1)(b) of the NTA. According to s 36(2) of the NTA, I have the power to proceed to make a determination on the future act determination applications bought in respect to M38/1287, M38/1288 and M38/1289.
Glen Kelly
Member
2 June 2021
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